Asia is at the heart of a trade boom as significant as anything seen in Europe or North America throughout history. This expansion is being driven by outsourced manufacturing and, increasingly, by Asian consumption of Asia-made products.

At an industry level, Intra-Asia is now the single largest container trade lane in the world. Our APL unit grew its Intra-Asia business by 17% in 2007. These robust demand conditions were accompanied by average revenue per FEU growth of 11%, driven by successful rate restoration programmes.

Asia recorded 21% year-on-year growth in logistics revenue and contributed 23% of overall APL Logistics revenues. We meet our customers’ Asian shipping and logistics needs through three regions – Greater China, South Asia and Asia/Middle East.

Led by mainland China, this region also encompasses Hong Kong, Macau and Taiwan. APL recently celebrated its 140th anniversary of doing business in China.

The nation of China lifted its 100 millionth container in 2007 and our Group continued to make a major contribution to that total with 46% of our volumes originating or terminating in Greater China. Our order for eight 10,000 TEU capacity ships to be deployed in Asia-Europe helps ensure we will play a major role in China reaching the next 100 million.

While globalisation has delivered opportunity, it has created more complexity, cost and congestion in the international supply chains that touch China. In 2007, we deployed additional innovative services to help overcome these challenges, and extended our OceanGuaranteed^SM time-definite service.

We broke new ground with the launch of our “Ocean53™” ocean-capable 53-foot containers. These big boxes are made in Southern China and have been deployed in the Transpacific trade carrying Chinese products to US markets.

Our Asia/Middle East region covers Japan, Korea, Australia, the ASEAN countries, the Middle East and Africa. As a whole, the region posted strong growth across Container Shipping, Terminals and Logistics.

We had a strong focus on Vietnam – one of Asia’s most high potential growth markets – which acceded to the World Trade Organisation in January 2007. In the same month, NOL became the first Singaporean company to establish a wholly-owned company to provide container transportation and logistics services in Vietnam and announced a significant expansion of the VICT terminal in which we are a substantial shareholder. We also launched the third in a trilogy of research on Asia’s emerging markets – “Vietnam Transportation and Logistics: Challenges and Opportunities”.

Our SZX service connecting South East Asia and South Asia with the US East Coast via the Suez Canal was launched, targeting customers from a range of business sectors with a common need for fast and reliable supply chain fulfilment. Indonesia is the largest contributor to the SZX and APL Logistics has shown leadership in the country, where we were named Frost & Sullivan’s best Fast-Moving Consumer Goods logistics provider – for the second year.

APL Philippines celebrated its 90th anniversary in 2007 and also opened a new reefer centre, complemented by a new service – the Mindanao Express – to cater for the increased global demand for Philippines fresh produce.

The Middle East is a major import-export centre. We have been in the region for more than 30 years. Our revenues have grown by 200% in the past decade. We continued to build our presence in 2007 with the establishment of wholly-owned offices in Bahrain and Egypt.

Our South Asia region encompasses India, Pakistan, Sri Lanka, Bangladesh, Afghanistan and Nepal.

India is at the heart of South Asia’s emergence. The “Made in India” label is increasingly common on a wide range of products. India’s growing middle class is also increasing demand for domestic and imported goods. However, the country’s transportation infrastructure is a major inhibitor of the flow of products along supply chains.

This market need and our pedigree as the pioneer of rail freight services in North America drove the development of APL IndiaLinx™, our successful container rail freight service.

In October, we became India’s first private sector operator to run dedicated weekly reefer trains.

We consolidated our leadership in other markets. In Sri Lanka, we recorded high double digit growth in both revenues and volumes. Our achievements were recognised for the second successive year by Sri Lanka’s prestigious Institute of Chartered Shipbrokers.

Burgeoning trade between China and India saw us launch the China India Express (CIX) service.